Xinhua News Agency, Beijing, January 15th Title: Looking at China’s new market from the change of Shangchao
Xinhua news agency reporter
"Market" is a window to observe economic vitality.
Consumption continues to change in recovery, online retailing is booming, and thousands of physical stores, supermarkets, convenience stores and shopping centers in China are undergoing unprecedented profound changes.
Recently, Xinhua News Agency reporters went into the market to conduct research, closely observed the transformation and transformation of physical retail in China, explored the changing times of consumption in China, and tried to reveal the potential, space and vitality contained in the "market" of China economy.
New Retail: Starting with People
At the beginning of the new year, the fiery consumer market is stirring the vitality of China’s economy.
During the New Year’s Day holiday, a number of shopping centers were opened, and the sales and passenger flow in many business districts increased significantly. According to the big data of China Unicom’s smart footprint, the total number of passengers in 43 key business districts nationwide was 42.54 million, up 271.2% year-on-year. Popular business districts such as Harbin Central Street, Xi ‘an Datang City that Never Sleeps, and Chongqing Jie Fangbei Pedestrian Street performed brilliantly. Among them, Harbin Central Street received 1.324 million person-times, up by 465.3% compared with the same period of last year, and this winter "burst into flames".
On January 9, 2024, tourists played on the central street of Harbin Bainian Old Street (photo of drone). Xinhua News Agency reporter Zhang Tao photo
The steady recovery of offline consumption highlights the continuous recovery of the consumer market in China.
Yang Daoling, director of the Big Data Analysis Division of the Big Data Development Department of the National Information Center, said that "popularity" is the most intuitive perspective for observing consumption vitality. By observing the flow of people around the business circle with the most concentrated offline consumption behavior, it is found that the offline consumption vitality in China was 108.2 in December 2023, which was 23.9 points higher than that in the same period in 2022. It was also the first time that the index exceeded 100 in 2023, which was better than the base period in 2019, and the vitality rebounded obviously.
On November 26, 2023, citizens dined in a hot pot restaurant in Lianyun District, Lianyungang City, Jiangsu Province. Xinhua News Agency (photo by Wang Chun)
Under the impact of the increasingly developed e-commerce online shopping, traditional consumer places such as department stores, supermarkets and shopping centers strive to explore the road of transformation in innovation and development.
Wuhan is the thoroughfare of nine provinces. In the middle of winter, the Wuhan Jiangxia Shopping Center in AEON Mengle City, which just opened, was crowded. On December 11th, 2023, Wuhan Bus opened the "Jiangxia Yongwang Mengle City Circular Line" to strengthen the bus connection between Jiangxia business district, residential quarters, subway stations and Jiangxia Yongwang.
Jiangxia District is not the traditional commercial center of Wuhan, but it is a typical representative of the new urban area in the process of urbanization. "Our investment focuses on the next five years." Hashimoto Tatsuya, managing director of AEON Dream City (China) Investment Co., Ltd. also said that AEON Dream City focuses on new urban areas with development potential, and the vast inland areas of China provide many investment opportunities.
As a large comprehensive retail and service enterprise group in Asia, AEON has operated nearly 400 stores with different formats in China, and will open three new shopping centers in Changsha and Hangzhou in the next two years.
With the gradual recovery of China’s economy, consumption rebounded obviously, and offline sales continued to recover. In the first 11 months of 2023, the total retail sales of social consumer goods increased by 7.2% year-on-year; Among them, the retail sales of entities above designated size increased by 4.9% year-on-year. According to the relevant report of China Chain Store & Franchise Association, there are about 400 newly opened shopping centers in 2023, and the number of convenience stores in over 60% of the cities surveyed has achieved positive growth.
The reporter found in an interview with Wuhan Jiangxia Shopping Center in Aeon Dream City that experiential consumption has replaced shopping as the main element to attract customers.
Create a super-large entertainment experience area, build a leisure life exchange space, and introduce popular catering … 21% of the area of Aeon Dream Music City Jiangxia Store is used to strengthen the experience format.
"After the epidemic, people pay more attention to communication with family and friends. It is rainy in Wuhan and hot in Leng Xia in winter, creating more indoor entertainment and leisure space will help to extend the customer’s detention time, which is directly proportional to sales. " Nengda Tuo, general manager of Wuhan Jiangxia Shopping Center in AEON Mengle City, also said.
Dong Chao, director of the Institute of Circulation and Consumption of the Research Institute of the Ministry of Commerce, said that compared with the convenient advantages of online consumption, offline consumption needs to make a fuss about the function of "scene experience" and change from paying attention to "material needs" to paying more attention to "spiritual needs". In addition to the transaction itself, the feelings created by the consumption scene, as well as the inner pleasure inspired by the gathering with partners and face-to-face communication between people, are the value advantages of the physical commercial retail space.
According to the research report of CITIC Securities, from May 2022 to October 2023, the proportion of retail stores in China decreased by 10%, while the proportion of restaurants, entertainment and life services increased by 5%, 2% and 2% respectively. In the past six months, young consumption, self-satisfaction experience and high-end retail stores have risen against the trend.
Pay more attention to the quality of consumption, the focus of consumption has shifted from commodity consumption to service consumption, and the consumer demand has been continuously subdivided-Shang Xiping, Party Secretary and President of Wangfujing Group Co., Ltd., summed up the changes that are taking place in China’s consumption structure.
"People’s demand for a better life is the main direction to lead consumption upgrading in the future." He said.
Qujiang, Xi ‘an, Datang, a city that never sleeps, has a strong ancient style that makes people feel like "crossing" to Chang ‘an City thousands of years ago.
During the New Year’s Day holiday, Xi ‘an tourism orders increased by 395% year-on-year. Among them, Qujiang New District welcomed 1,115,200 tourists and realized a comprehensive tourism income of 500 million yuan. The scenic spots included in the provincial monitoring points in Suzhou received a total of 3.385 million tourists, up 284.1% year-on-year and 34.5% compared with 2019.
The integration of traditional culture and business travel has promoted the interactive upgrading of commodity and cultural tourism consumption, and the rapid rise of domestic "tidal products" consumption.
The Wall Street Journal website said: "China buyers are increasingly turning to local brands." "International brands are stepping up their efforts to emulate local competitors in China, such as expanding online sales channels and designing products that incorporate China cultural elements."
The heads of many shopping centers interviewed by the reporter believe that among the three elements of commerce "goods, markets and people", traditional retailing pays more attention to "goods" and "markets". As long as there are good and complete products and a good business circle location, it will be successful; Nowadays, new retail is more concerned with people’s needs, empowered by new technologies such as big data, and superimposed with elements such as culture and lifestyle, which is profoundly changing the logic of traditional business.
In August 2023, the National Bureau of Statistics released the service retail sales data for the first time, covering service activities in the fields of transportation, accommodation, catering, education, health, sports, entertainment and so on, which became a vivid footnote for China’s consumption transformation. According to statistics, service consumption accounts for more than 40% of the national per capita consumption expenditure.
Turning our eyes to the vast third-and fourth-tier cities and county markets, we can feel the vastness and diversity of China market.
Pangdonglai Supermarket, headquartered in Xuchang, Henan Province, is rooted in local markets such as Xuchang and Xinxiang, and its operating income this year is estimated to exceed 10 billion yuan. Biyoute Supermarket, which is active in Northeast China, has an annual sales of over 5 billion yuan.
Pei Liang, honorary president of China Chain Store & Franchise Association, said that one of the characteristics of county-level commercial development is the regional uniqueness of "one county, one product". In the small town market, products and services are more closely bound.
On November 26th, 2023, citizens bought hats in a shop in congjiang county, Qiandongnan Miao and Dong Autonomous Prefecture. Xinhua News Agency (photo by Lu Zhongnan)
According to statistics, the population of county towns and county-level cities in China accounts for about 30% of the permanent population of cities and towns in China. The county market, which is far from being fully developed, attracts foreign chain institutions to accelerate their layout.
In the third quarter of 2023, Starbucks opened 326 new stores in China, and yingtan in Jiangxi and Shangluo in Shaanxi all opened stores for the first time. Sam signed a contract to open new stores in Shunde, Foshan, and accelerated the construction of new stores in Jinjiang, Quanzhou and Liaobu, Dongguan.
Cheng Shi, chief economist of ICBC International, believes that the sinking market and the demand for upgrading will create a hot investment spot for China’s consumer infrastructure. It is estimated that the proportion of per capita service consumption expenditure in total consumption expenditure in China is expected to rise to 50% or above after 2030.
New supply: leading demand
Walking into the Sanyuanli vegetable market in the East Third Ring Road of Beijing, you can feel the blending and collision of "international norms" and "fireworks".
This vegetable market is small, with about 130 stalls distributed on both sides of a 170-meter-long passage; But it is not small, and all kinds of quality ingredients are dazzling. There is a cafe in the vegetable market. Occasionally, artists hold exhibitions here, writers hold new book conferences, or young ladies who come to buy have a cup of Yunnan coffee here.
In the cafe, the reporter met Yifan, who had just finished eating. In Yifan’s shopping bag, there are corn shoots, peanut bud and Wenchang chicken … She said that she is going to make chicken coconut for her friends today. The ingredients here are of good quality, so she often comes.
The vegetable market is the most smoky place in a city. Recently, more and more young people have punched in the food market, and the number of raiders notes and views on the food market on social platforms has greatly increased, and a number of "online celebrity" food markets have emerged.
The other side of the innovation and transformation of the consumer side is the reconstruction and transformation of the supply side.
Box Horse’s global supply chain brings more "fresh flavor" to consumers: in just 48 hours, the fresh Portunus caught from Lianyungang, Jiangsu Province can appear in the offline store in Guiyang, Guizhou Province; Tropical imported fruits such as durian, coconut green and pitaya can also ensure uninterrupted supply in winter …
The person in charge of Box Horse told the reporter that "the global supply chain will be used to make China a big market" by means of direct production, direct charter flights, opening up green channels, fixed supply by sales and customization on demand.
If "online celebrity" vegetable market brings "new ideas" through cross-border and fresh supermarkets bring "freshness" through opening up links, then Dong ‘an Market on Wangfujing Street starts from the source and adapts and leads consumption with "new products".
Open and transparent containers, new Chinese visual effects, designers and trend brands … In January, 2022, Dong ‘an market, which has a history of about 120 years, was rebuilt and opened, and it was transformed into a global fashion brand buyer’s shop, attracting about 400 international trend brands, and nearly half of them entered the domestic market for the first time.
"This transformation is to form differentiated competitiveness, better meet the personalized and segmented needs of consumers, and make the old brand Dong’ an Market fashionable." Jing Zuo, general manager of self-management department of Wangfujing Group and vice chairman of Ruijin Shangpin Company, said.
The China market is infinitely vast. For suppliers, the challenge lies in whether they can create effective supply, meet, stimulate and even lead the demand.
Traditional physical retail actively embraces change, and new consumption scenarios accelerate incubation.
On November 25, 2023, in Tiansheng Street, Longquan Street, Wuxing District, Huzhou City, Zhejiang Province, tourists cooked tea in a drink shop. Xinhua News Agency (photo by Ivan)
In Wuhan, Hubei Province, the era of Wushangmeng, which is equipped with ski resorts and playgrounds, has become a new generation of "online celebrity" punching places; The supermarket in Vientiane City in Hangzhou opened the Hangzhou study room; The art museum built by Shanghai K11 Shopping Art Center has held more than 80 art exhibitions and more than 700 exhibition series lectures since its opening.
"Business+Pioneer Proving Ground", "Business+Humanities and Arts" and "Business+Outdoor" … "Business +X" with more elements to meet the diverse needs of consumers.
"At present and in the future, the shopping center is not only a daily consumption place for consumers, but also a window to reflect the beautiful life of the city, and it is also an important space to lead a regional consumption upgrade." Yan Liang said.
In order to promote the construction of an international consumption center city, Beijing plans to open about 1.1 million square meters of large-scale commercial facilities in 2024, including about 800,000 square meters of new construction and 300,000 square meters of renovation and upgrading, and will create a number of new integrated consumption scenes around blocks, terraces, waterfront, shallow mountains, competitions, performances and night economy, so as to make consumers’ lives more convenient and better.
From competition to integration, the relationship between online retailing and offline retailing is changing.
The advantages of online retailing in business flow, information flow and capital flow, combined with the advantages of physical stores in logistics, service and experience, are triggering deep-seated changes in the retail industry.
On August 15, 2023, in Longgang District, Shenzhen, a food delivery drone walked through high-rise buildings. Xinhua News Agency reporter Liang Xushe
Intelligent settlement, self-service sales, instant delivery … In the past three years, Boxma Xiansheng has opened more than 100 new stores. Under the impact of the epidemic and online shopping, a group of entities have accelerated the pace of opening stores against the trend, benefiting from online and offline mutual empowerment.
Entering a live e-commerce company in Binjiang District, Hangzhou, Zhejiang Province, the data visualization platform shows the drainage data of online live broadcast on offline consumption in real time. Dining 300 million yuan, cinemas 165 million yuan, scenic spots 157 million yuan … The ever-changing figures reveal the consumption vitality behind live stream economy.
In Binjiang District, new live broadcast scenes such as shop broadcast and factory broadcast emerge one after another. In the first three quarters of 2023, the total contribution of live e-commerce enterprises in Binjiang District was 16.36 billion yuan, up 17.5% year-on-year, accounting for 39.8% of the total social contribution.
Pan Jie, deputy director of the Internet Industrial Park Development Center in Hangzhou High-tech Zone (Binjiang), said that more and more live broadcast platforms integrate offline sales with online consumption, and live broadcast of big data can help consumers understand consumer needs faster, thus guiding businesses to develop and produce more accurately.
On December 8, 2023, the anchor brought the goods in the live broadcast base of Laomeihua. Founded in 1911, Laomeihua is famous for its "Melaleuca" cloth shoes in history, and it is a "time-honored Chinese brand" which enjoys a good reputation in Guinness. Xinhua News Agency reporter Li Ran photo
Internet of Things, big data, cloud computing, artificial intelligence … With the empowerment of new technologies, the modern logistics system and modern infrastructure system have been accelerated, and the supply side has been continuously upgraded and innovated to promote a higher level of dynamic balance between supply and demand.
New Blue Ocean: Launching Super-large-scale Market Engine
Recently, the reporter went to the community canteen located on the first floor of Chang ‘an Shopping Mall in the convenient living circle of Yuetan Street in Beijing. Just after 5 pm, many people have dined, of which the elderly account for about half.
The community canteen opened last year has become a "warm-hearted canteen" favored by residents in surrounding communities; The "life station" on the basement level provides convenient life services such as minor repairs and minor repairs; Inamori and his bookstore in the shopping mall have launched the service of "going to the bookstore after school". After school, children from nearby schools will be received by the bookstore staff to do their homework and carry out activities such as reading and cultural salons …
Changan Shopping Mall, established in 1990, has been transformed since 2019, and has found a road to community business development.
In the face of more diversified consumer demand, the traditional department store "one thousand stores" has been accelerated.
Xidan Shopping Mall, which was born in 1930s, is about to usher in a new round of renovation. After this renovation, this landmark building with the longest history in Xidan business circle will abandon the traditional department store model and focus on quality life, sports health, intelligent life and cultural inheritance.
"The transformation plan has been brewing for two years, just to understand what to hold according to market characteristics. What to innovate? " Gao Shaoyun, general manager of Xidan Shopping Mall, said, "The context of Xidan Shopping Mall can’t be lost. We should continue to tell Xidan stories and Beijing stories well."
"Transformation itself means opportunities and dividends." Shang Xiping said that Wangfujing Group has many traditional businesses such as Chang ‘an Shopping Mall, Xidan Shopping Mall and Beijing Department Store. The key is to combine the different characteristics of consumer groups in different regions to form a unique consumption memory point for each store.
The continuous emergence of vertical consumer markets, such as silver-haired economy, healthy economy, self-satisfied economy and sustainable economy, is a vivid portrayal of the continuous upgrading of consumption structure and the continuous expansion of space in China.
On December 30, 2023, skiers skied in Vanke Songhua Lake Resort in Jilin City, Jilin Province. Xinhua News Agency reporter Xu Changshe
Since 2023, through a series of "combination boxing" to promote consumption, China’s consumption has been accelerated and the consumption structure has been upgraded. In 2023, the sales volume of new energy vehicles was 9.495 million, accounting for more than 30% of the total sales volume of new cars; In 2023, the total box office of China movies reached 54.915 billion yuan; In the first three quarters, the per capita service consumption expenditure of residents increased by 14.2% year-on-year, accounting for 2 percentage points of the per capita consumption expenditure of residents. The contribution rate of final consumption expenditure to GDP growth reached 83.2%, and the pulling effect of consumption on economic growth became more prominent.
"China’s economy is steadily transforming into a consumption-driven one." According to the report of consulting firm McKinsey, the retail sales in China market will increase by 10 trillion yuan in the next five years, which will make China the largest single growth market in the world, and the incremental scale is equivalent to the combined retail sales of Indian, Indonesian and Korean.
According to McKinsey’s estimation, the number of middle-income and high-income families in China is expected to reach 200 million in 2025 and 260 million in 2030. The number of high-income cities is expected to reach 82 in 2025 and 93 in 2030. The continuous urbanization and rising income level will continue to drive consumption growth in China.
Looking at the economic development history of the United States, Germany, Britain, Japan, South Korea and other economies, the domestic demand structure of these countries shows the characteristics of "domestic demand leading and consumption leading" when the per capita GDP exceeds $20,000.
Guo Liyan, deputy director of the Economic Research Institute of China Macroeconomic Research Institute, said that as China moves towards a moderately developed country, the proportion of China’s consumption rate and domestic demand in GDP will continue to increase, which will be the key point for China to cultivate and stimulate the domestic market potential after the new journey of building a socialist modern country in an all-round way.
"Give full play to the advantages of super-large-scale market and strong production capacity", "Promote consumption from post-epidemic recovery to continuous expansion, cultivate and expand new consumption", "Stabilize and expand traditional consumption", "Increase the income of urban and rural residents, expand the scale of middle-income groups, and optimize the consumption environment" … The Central Economic Work Conference held at the end of 2023 made long-term arrangements.
A big China market with continuous potential release, continuous transformation and innovation, constantly meets people’s yearning for a better life and brings more opportunities to global investors. (Reporter An Bei, Yu Jiaxin, Xie Xiyao, Wang Yueyang, Liu Yujia, Wang Yuxiao)
